WellPoint posts a higher-than-expected 38% increase in earnings, but its forecast for $7.60 a share in full-year earnings is below analyst expectations.

Health insurance giant WellPoint Inc. gave a lower-than-expected profit outlook for 2013 as it prepares for the federal healthcare overhaul and continues to search for a new chief executive.

WellPoint, which runs Anthem Blue Cross in California and health plans in 13 other states, reported a bigger-than-expected 38% jump in fourth-quarter net income Wednesday, boosted by one-time gains related to an income tax settlement and investments.

But the company said it remains cautious about the year ahead in light of federal budget battles over Medicare and Medicaid and upheaval in the health insurance markets from the federal Affordable Care Act. WellPoint estimated full-year earnings of $7.60 a share, below analysts' expectations of $7.94 a share compiled by FactSet.

The Indianapolis company said the search is still underway for a new CEO to replace Angela Braly, who stepped down in August after major shareholders expressed dissatisfaction with the company's performance. John Cannon, WellPoint's interim chief executive, said the company expects to name a new leader some time in the first quarter.

The company's shares rose $1.03, or 1.6%, to $64.83 in trading Wednesday.

The health insurer said its fourth-quarter net income was $464.2 million, or $1.51 a share, up from $335.3 million, or 96 cents a share, a year earlier. Excluding certain one-time items, the company said adjusted fourth-quarter profit was $1.03 a share, up 4% from 99 cents a share in the year-earlier quarter.

WellPoint is the nation's second-largest health insurer, with 36 million customers nationwide, just behind UnitedHealth Group Inc. WellPoint said revenue in the fourth quarter inched up 1% to $15.3 billion compared with a year ago.

The company said it is spending about $300 million this year to bolster its Medicare Advantage business and to prepare for insurance exchanges in California and other states that are opening next January under the federal healthcare law.

WellPoint is also pursuing growth from the federal government's planned expansion of Medicaid, the insurance program for the poor. Last month, WellPoint completed its $4.5-billion acquisition of Medicaid insurer Amerigroup Corp.

Overall, the company said it serves 4.5 million Medicaid patients in 20 states, making it the industry leader. But it said that business has been "underperforming," and in California it was recently hurt by higher-than-expected medical costs for about 90,000 people enrolled in Medi-Cal, the state's Medicaid program.

WellPoint said California officials have agreed to increase payments for those patients to reflect the higher costs, but that change is awaiting federal approval.

The company is also a major player in an upcoming program aimed at improving care and lowering costs for patients enrolled in both Medicare and Medi-Cal. Enrollment in that state initiative has been delayed until September.